50 — Q
UALIFIER
P
LUS
®
III
FX
Prepaid/Odd-Days Interest and APR
Find the monthly payment on a $100,000 loan at 8.25% annual
interest and 30-year term. Then, find the amount of odd-days inter-
est, or “prepaid” interest due, if the escrow closes on 7/21/03 and
the first payment is due 8/1/03.
STEPS
KEYSTROKES
DISPLAY
Clear calculator
o o
0.00
Enter Loan Amount
1 0 0 ) l
100,000.00
Enter annual Interest rate
8 • 2 5 ˆ
8.25
Enter Term in years
3 0 T
30.00
Find monthly P&I Payment
p
“run” 751.27
Find days between escrow closing date and
date of 1st payment
8 : 1 : 0 3 –
7 : 2 1 : 0 3 =
11.00
Find the prepaid interest
due at closing
s :
252.08*
*Note: This is based on a 360-day year, as most banks use this method for comput-
ing prepaid interest.
— DO NOT CLEAR CALCULATOR —
Now, without clearing the calculator, add the prepaid interest to the
loan's points and fees if they are equal to 1.5% and $500, respec-
tively. Then find the Annual Percentage Rate (APR), based on these
closing costs.
STEPS
KEYSTROKES
DISPLAY
Store the prepaid interest
in memory
μ
252.08
Find Loan Costs:
Recall Loan Amount
® l
100,000.00
Find point cost
x 1 • 5 % =
1,500.00
Add fees and find total
+ 5 0 0 =
2,000.00
Add prepaid interest
stored in memory
+ ® μ =
2,252.08
Find APR for this loan
s ˆ
“run” 8.50
Clear All
s x
“All Cleared” 0.00
